Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2013

or

¨

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from
to

US Airways
Group, Inc.

(Exact name of registrant as specified in its charter)

(Commission File No. 1-8444)

54-1194634 (IRS Employer Identification No.)

111 West Rio Salado
Parkway, Tempe, Arizona 85281

(Address of principal executive offices, including zip code)

US Airways, Inc.

(Exact name of registrant as specified in its charter)

(Commission
File No. 1-8442)

53-0218143 (IRS Employer Identification No.)

111 West Rio Salado Parkway, Tempe, Arizona 85281

(Address of principal executive offices, including zip code)

(480)
693-0800

(Registrants telephone number, including area code)

Delaware

(State of Incorporation of all Registrants)

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No ¨

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

US Airways Group, Inc.

Large accelerated filer x

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company ¨

US Airways, Inc.

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer x

Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

US Airways Group, Inc.

Yes

¨

No

x

US Airways, Inc.

Yes

¨

No

x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13
or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

US Airways Group, Inc.

Yes

x

No

¨

US Airways, Inc.

Yes

x

No

¨

As of July 19, 2013, there were approximately 192,016,784 shares of US Airways Group, Inc. common stock outstanding.

As of July 19, 2013, US Airways, Inc. had 1,000 shares of common stock outstanding, all of which were held by US Airways Group, Inc.

This combined Quarterly Report on Form 10-Q is filed by US Airways Group, Inc. (US
Airways Group) and its wholly owned subsidiary US Airways, Inc. (US Airways). References in this Quarterly Report on Form 10-Q to we, us, our and the Company refer to US Airways Group
and its consolidated subsidiaries.

Note Concerning Forward-Looking Statements

Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as may, will, expect, intend, anticipate, believe,
estimate, plan, project, could, should, would, continue and similar terms used in connection with statements regarding, among others, our outlook, expected fuel
costs, the revenue and pricing environment, and our expected financial performance and liquidity position. These statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations
and intentions and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause our actual results and
financial position to differ materially from these statements. These risks and uncertainties include, but are not limited to, those described below under Part II, Item 1A, Risk Factors, and the following:



the impact of significant operating losses in the future;



downturns in economic conditions that adversely affect our business;



the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel;



competitive practices in the industry, including the impact of industry consolidation;



increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates;



our high level of fixed obligations and our ability to fund general corporate requirements, obtain additional financing and respond to
competitive developments;



any failure to comply with the liquidity covenants contained in our financing arrangements;



provisions in our credit card processing and other commercial agreements that may affect our liquidity;



the impact of union disputes, employee strikes and other labor-related disruptions;



our inability to maintain labor costs at competitive levels;



interruptions or disruptions in service at one or more of our hub airports;



regulatory changes affecting the allocation of slots;



our reliance on third-party regional operators or third-party service providers;

risks relating to our common stock, market factors affecting the price of our common stock, and the rights of stockholders; and



other risks and uncertainties listed from time to time in our reports to and filings with the Securities and Exchange Commission (the
SEC).

All of the forward-looking statements are qualified in their entirety by reference to the
factors discussed in Part II, Item 1A, Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. There may be other factors of which we are not currently aware that may affect matters discussed in the forward-looking
statements and may also cause actual results to differ materially from those discussed. We assume no obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other
factors affecting these estimates other than as required by law. Any forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q or as of the dates indicated in the statements.

Part I. Financial Information

This combined Quarterly Report on Form 10-Q is filed by US Airways Group and US Airways and includes the condensed consolidated financial statements of each company in Item 1A and Item 1B,
respectively.

The accompanying unaudited condensed consolidated financial statements of US Airways Group, Inc. (US Airways
Group or the Company) should be read in conjunction with the consolidated financial statements contained in US Airways Groups Annual Report on Form 10-K for the year ended December 31, 2012. The accompanying unaudited
condensed consolidated financial statements include the accounts of US Airways Group and its wholly owned subsidiaries. Wholly owned subsidiaries include US Airways, Inc. (US Airways), Piedmont Airlines, Inc. (Piedmont), PSA
Airlines, Inc. (PSA), Material Services Company, Inc. (MSC) and Airways Assurance Limited (AAL). All significant intercompany accounts and transactions have been eliminated.

Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have
been included in the unaudited condensed consolidated financial statements for the interim periods presented. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results
could differ from those estimates. The most significant areas of judgment relate to passenger revenue recognition, impairment of long-lived and intangible assets, the frequent traveler program and the deferred tax asset valuation allowance. The
Companys accumulated other comprehensive loss balances at June 30, 2013 and December 31, 2012 related to pension and other postretirement benefits.

2. Merger Agreement

On February 13, 2013, AMR Corporation, a Delaware corporation (AMR), US Airways Group, and AMR Merger
Sub, Inc., a Delaware corporation and wholly owned subsidiary of AMR (Merger Sub), entered into an Agreement and Plan of Merger (as subsequently amended, the Merger Agreement), providing for a business combination of AMR and
US Airways Group. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into US Airways Group (the Merger), with US Airways Group as the
surviving corporation and as a wholly owned subsidiary of AMR. The Merger Agreement and the transactions contemplated thereby are to be effected pursuant to a plan of reorganization of AMR and certain of its direct and indirect domestic subsidiaries
(the Debtors) in connection with their currently pending cases under Chapter 11 of Title 11 of U.S. Code, 11 U.S.C. Sections 101 et seq. (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of
New York (the Bankruptcy Court). AMRs plan of reorganization is subject to confirmation by the Bankruptcy Court in accordance with the requirements of the Bankruptcy Code. Consummation of the Merger is subject to confirmation of
AMRs plan of reorganization and other customary closing conditions, including certain regulatory approvals. The Merger was approved by US Airways Groups shareholders on July 12, 2013.

3. Special Items, Net

Special items, net as shown on the condensed consolidated statements of operations included the following charges for
the three and six months ended June 30, 2013 and 2012 (in millions):

Three MonthsEnded June
30,

Six
MonthsEnded June 30,

2013

2012

2013

2012

Special items, net (a)

$

24

$

9

$

63

$

11

(a)

The 2013 second quarter consisted primarily of merger related costs. The 2013 six month period consisted primarily of merger related costs and charges related to the
ratification of the US Airways flight attendant collective bargaining agreement.

The 2012 second quarter and
six month periods consisted primarily of merger related and auction rate securities arbitration costs.

In addition, other nonoperating, net in the second quarter of 2013 included $31 million
primarily related to special debt extinguishment charges due to non-cash write offs of debt discount and debt issuance costs in connection with conversions of 7.25% convertible senior notes and repayment of the former Citicorp North America term
loan. Other nonoperating, net in the six month period of 2013 included $31 million in special charges primarily related to debt extinguishment costs discussed above, offset in part by a $30 million special credit in connection with an award received
in an arbitration related to previous investments in auction rate securities.

Other nonoperating, net in the second quarter
of 2012 included $3 million in special charges for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft. Other nonoperating, net in the six month period of 2012 included a
$73 million special gain related to the slot transaction with Delta Air Lines, Inc., offset in part by $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs discussed above.

4. Earnings Per Common Share

Basic earnings per common share (EPS) is computed on the basis of the weighted average number of shares of
common stock outstanding during the period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of potentially dilutive shares of common stock outstanding during the period using the treasury
stock method. Potentially dilutive shares include outstanding employee stock options, employee stock appreciation rights (SARs), employee restricted stock units (RSUs) and convertible debt. The following table presents the
computation of basic and diluted EPS (in millions, except share and per share amounts):

Three MonthsEnded
June 30,

Six MonthsEnded
June 30,

2013

2012

2013

2012

Basic EPS:

Net income

$

287

$

306

$

331

$

355

Weighted average common shares outstanding (in thousands)

173,215

162,310

168,058

162,220

Basic EPS

$

1.66

$

1.89

$

1.97

$

2.19

Diluted EPS:

Net income

$

287

$

306

$

331

$

355

Interest expense on 7.25% convertible senior notes

4

8

10

15

Interest expense on 7% senior convertible notes









Net income for purposes of computing diluted EPS

$

291

$

314

$

341

$

370

Share computation for diluted EPS (in thousands):

Weighted average common shares outstanding

173,215

162,310

168,058

162,220

Dilutive effect of stock awards

6,041

3,726

6,070

2,832

Assumed conversion of 7.25% convertible senior notes

28,533

37,746

33,140

37,746

Assumed conversion of 7% senior convertible notes

142

199

171

199

Weighted average common shares outstanding as adjusted

207,931

203,981

207,439

202,997

Diluted EPS

$

1.40

$

1.54

$

1.65

$

1.82

The following were excluded from the computation of diluted EPS because inclusion of shares would be antidilutive
(in thousands):

7.25% convertible senior notes, interest only payments until due in 2014

51

172

Airbus advance, repayments through 2018

90

83

Industrial development bonds, fixed interest rate of 6.30%, interest only payments until due in 2023

29

29

7% senior convertible notes



5

870

489

Total long-term debt and capital lease obligations

5,952

4,942

Less: Total unamortized discount on debt

(101

)

(149

)

Current maturities

(473

)

(417

)

Long-term debt and capital lease obligations, net of current maturities

$

5,378

$

4,376

The Company was in compliance with the covenants in its debt agreements at June 30, 2013.

2013 Citicorp Credit Facility

On May 23, 2013, US Airways entered into a term loan credit facility (the 2013 Citicorp credit facility) with Citicorp North America, Inc., as administrative agent, and a syndicate of
lenders pursuant to which US Airways borrowed an aggregate principal amount of $1.6 billion. Approximately $1.3 billion of the net proceeds were applied to repay US Airways Groups former Citicorp North America loan and certain other
secured debt of US Airways with remaining net proceeds to be used for general corporate purposes. As a result of the repayment of this loan, the Company recorded approximately $8 million in special debt extinguishment charges which are included
within other nonoperating expense, net on the accompanying condensed consolidated statement of operations. US Airways Group and certain other subsidiaries of US Airways Group are guarantors of the 2013 Citicorp credit facility.

The 2013 Citicorp credit facility consists of $1.0 billion of tranche B-1 term loans (Tranche B-1) and $600 million of
tranche B-2 term loans (Tranche B-2). The 2013 Citicorp credit facility is prepayable at any time with a premium of 1% applicable to certain prepayments made prior to November 23, 2013.

The 2013 Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at US Airways option, LIBOR
(subject to a floor) plus an applicable LIBOR margin. The applicable index margin for Tranche B-1 and Tranche B-2 is 2.25% and 1.50%, respectively. The applicable LIBOR margin for Tranche B-1 and Tranche B-2 is 3.25% and 2.50%, respectively. The
applicable index and LIBOR margins are subject to a step down of 0.25% upon the consummation of the Merger. As of June 30, 2013, the interest rate was 4.25% based on a 3.25% LIBOR margin for Tranche B-1 and 3.50% based on a 2.50% LIBOR margin
for Tranche B-2.

Tranche B-1 and Tranche B-2 mature on May 23, 2019 and November 23, 2016, respectively, and each
is repayable in annual installments to be paid on each anniversary of the closing date in an amount equal to 1% of the initial aggregate principal amount of the loans with any unpaid balance due on the maturity date of the respective tranche.

The obligations of US Airways under the 2013 Citicorp credit facility are secured by liens
on certain route authorities to operate between certain specified cities, certain take-off and landing rights at certain airports and certain other assets of US Airways.

Upon consummation of the Merger, AMR (or its successor) and American Airlines, Inc. will be required to join the 2013 Citicorp credit facility as obligors, at which time certain dollar-limited exceptions
to restrictive covenants and certain cross-default thresholds will automatically be increased.

The 2013 Citicorp credit
facility includes covenants that, among other things, (a) require US Airways to maintain (i) unrestricted liquidity of not less than $850 million prior to the Merger and AMR (or its successor) to maintain unrestricted liquidity of not
less than $2 billion following the Merger, in both cases with not less than $750 million held in accounts subject to control agreements, and (ii) a minimum ratio of appraised value of collateral to the outstanding loans under the facility
of 1.5 to 1.0 and (b) restrict the ability of US Airways Group and its subsidiaries party to the 2013 Citicorp credit facility (and after the Merger AMR, or its successor, and its subsidiaries party to the 2013 Citicorp credit facility) to make
certain investments and restricted payments. The 2013 Citicorp credit facility contains events of default customary for similar financings, including a cross-acceleration provision to certain other material indebtedness of US Airways and the
guarantors.

6.125% Senior Notes

On May 24, 2013, US Airways Group issued $500 million aggregate principal amount of 6.125% Senior Notes due 2018 (the 6.125% senior notes), the net proceeds of which will be used for
general corporate purposes. These notes bear interest at a rate of 6.125% per annum, which is payable semi-annually on each June 1 and December 1, beginning December 1, 2013. The 6.125% senior notes mature on June 1, 2018
and are fully and unconditionally guaranteed by US Airways. The 6.125% senior notes are general unsecured senior obligations of the Company.

The 6.125% senior notes may be accelerated upon the occurrence of events of default, which are customary for securities of this nature. The Company, at its option, may redeem some or all of the 6.125%
senior notes at any time at a redemption price equal to the greater of (1) 100% of the principal amount of the 6.125% senior notes to be redeemed and (2) a make-whole amount based on the sum of the present values of the remaining scheduled
payments of principal and interest on the 6.125% senior notes discounted to the redemption date using a rate based on comparable U.S. Treasury securities plus 50 basis points, plus in either case accrued and unpaid interest to the redemption date.
In the event of a specified change in control (not including the Merger), each holder may require the Company to repurchase all or a portion of their 6.125% senior notes for cash at a price equal to 101% of the principal amount of the 6.125% senior
notes to be repurchased plus any accrued and unpaid interest, if any, to (but not including) the repurchase date.

2013-1 EETCs

In April 2013, US Airways created two pass-through trusts which issued approximately $820 million aggregate face amount of Series 2013-1 Class A and Class B EETCs in connection with the financing of
18 Airbus aircraft scheduled to be delivered from September 2013 to June 2014. The 2013-1 EETCs represent fractional undivided interests in the respective pass-through trusts and are not obligations of US Airways. Proceeds received from the sale of
EETCs are initially held by a depository in escrow for the benefit of the certificate holders until US Airways issues equipment notes to the trust, which purchases the notes with a portion of the escrowed funds. These escrowed funds are not
guaranteed by US Airways and are not reported as debt on US Airways condensed balance sheet because the proceeds held by the depository are not US Airways assets. The escrowed proceeds will be used to purchase Series A and Series B
equipment notes as the new aircraft are delivered. The Series A equipment notes will bear interest at 3.95% per annum with a final expected distribution date of November 2025. The Series B equipment notes will bear interest at 5.375% per
annum with a final expected distribution date of November 2021. The equipment notes will be obligations of US Airways and will be unconditionally guaranteed by US Airways Group.

2012-2 EETCs

In June 2013, US Airways created a new pass-through trust and issued a new class of its US Airways Pass Through Certificates, Series 2012-2: Class C in the aggregate face amount of $100 million. US
Airways previously issued two classes of US Airways Pass Through Certificates, Series 2012-2: Class A and Class B, pursuant to separate trusts established for each of the Class A certificates and Class B certificates at the time of the
issuance thereof in December 2012.

In the second quarter of 2013, US Airways issued $345 million of equipment notes in three
series under its 2012-2 EETCs: Series A equipment notes in the amount of $223 million bearing interest at 4.625% per annum, Series B equipment notes in the amount of $69 million bearing interest at 6.75% per annum and Series C equipment
notes in the amount of $53 million bearing interest at 5.45% per annum. Interest on the equipment notes is payable semiannually in June and December of each year and began in June 2013 for Series A and Series B, and will begin in December 2013
for Series C. Principal payments on the Series A and Series B equipment notes are scheduled to begin in December 2013. The final payments on the Series A equipment notes, Series B equipment notes and Series C equipment notes will be due in June
2025, June 2021 and June 2018, respectively. US Airways payment obligations under the equipment notes are fully and unconditionally guaranteed by US Airways Group. The only principal payments due on the Series C equipment notes are the
principal payments that will be due on the final payment date. The net proceeds from the issuance of these equipment notes were used to finance six Airbus aircraft delivered in May 2013 through June 2013. The equipment notes are secured by liens on
aircraft.

Other Aircraft Financing Transactions

In the first quarter of 2013, US Airways issued $183 million of equipment notes in three series under its 2012-1 EETCs completed in May
2012: Series A equipment notes in the amount of $111 million bearing interest at 5.90% per annum, Series B equipment notes in the amount of $37 million bearing interest at 8% per annum and Series C equipment notes in the amount of $35
million bearing interest at 9.125% per annum. The equipment notes are secured by liens on aircraft.

In the third quarter
of 2012, US Airways entered into an agreement to acquire five Embraer 190 aircraft from Republic Airline, Inc. (Republic). US Airways took delivery of three aircraft in 2012 and the remaining two aircraft in the first quarter of 2013. In
connection with this agreement, US Airways assumed the outstanding debt on these aircraft upon delivery and Republic was released from its obligations associated with the principal due under the debt.

7.25% Convertible Senior Notes

In the second quarter of 2013, holders converted approximately $121 million principal amount of the 7.25% convertible senior notes, resulting in the issuance of approximately 26.5 million shares of
the Companys common stock. In connection with the conversion of these notes, the Company recorded approximately $23 million in special debt extinguishment charges which are included within other nonoperating expense, net on the accompanying
condensed consolidated statement of operations.

Fair Value of Debt

The carrying value and estimated fair value of the Companys long-term debt was (in millions):

June 30, 2013

December 31, 2012

CarryingValue

FairValue

CarryingValue

FairValue

Long-term debt, including current maturities

$

5,851

$

6,109

$

4,793

$

5,021

The fair values were estimated using quoted market prices where available. For long-term debt not
actively traded, fair values were estimated using a discounted cash flow analysis based on the Companys current incremental borrowing rates for similar types of borrowing arrangements. If the Companys long-term debt was measured at fair
value, it would have been categorized as Level 2 in the fair value hierarchy.

At December 31, 2012, gross net operating losses (NOLs) available for use by the Company were approximately
$1.5 billion for federal income tax purposes. To the extent profitable, all of the Companys NOLs are expected to be available for use in 2013. The Company will use these NOLs to reduce its cash tax obligations when profitable going forward.
The NOLs expire during the years 2025 through 2031. The Company also had approximately $69 million of tax-effected state NOLs at December 31, 2012.

At December 31, 2012, the Company was in a net deferred tax asset position for financial reporting purposes, which included the NOLs, and was subject to a full valuation allowance. The federal and state
valuation allowances were $118 million and $42 million, respectively, which included $32 million allocated primarily to certain federal capital loss carryforwards.

For each of the three and six months ended June 30, 2013, the Company utilized NOLs to offset its taxable income. Historically, utilization of NOLs reduced the Companys net deferred tax asset
and in turn resulted in the release of its valuation allowance, which offset the Companys tax provision dollar for dollar. The Companys second quarter 2013 pre-tax income resulted in the utilization of NOLs and the Companys
remaining valuation allowance associated with federal income taxes. This release of valuation allowance offset only a portion of the Companys tax provision. Accordingly, in each of the three and six months ended June 30, 2013, the Company
recorded $65 million of non-cash federal income tax expense and $2 million of state income tax expense related to certain states where NOLs were limited or unavailable to be used. As of June 30, 2013, the Company had approximately $1.1 billion of
NOLs remaining for federal income tax purposes.

For each of the three and six months ended June 30, 2012, NOL usage and
release of valuation allowance offset the Companys tax provision. As a result, the Company did not record federal income tax expense and recorded a nominal amount of state income tax expense related to certain states where NOLs were limited or
unavailable to be used.

When profitable, the Company is ordinarily subject to Alternative Minimum Tax (AMT).
However as the result of a special tax election made in 2009, the Company was able to utilize AMT NOLs to fully offset its AMT taxable income for each of the three and six months ended June 30, 2013 and 2012.

7. Express Expenses

Expenses associated with the Companys wholly owned regional airlines and affiliate regional airlines operating as
US Airways Express are classified as express expenses on the condensed consolidated statements of operations. Express expenses consist of the following (in millions):

The Company is party to an arbitration proceeding relating to a grievance brought by its pilots union to the effect
that, annually since May 2010, this work group was entitled to an increase in wages by operation of the applicable collective bargaining agreement. The arbitrator has issued a decision in the Companys favor, and a subsequent meeting
requested by the union has been held with the arbitrator to address that decision. The Company believes that the unions position is without merit and that the possibility of an adverse outcome is remote.

On April 21, 2011, US Airways filed an antitrust lawsuit against Sabre Holdings Corporation, Sabre Inc. and Sabre Travel
International Limited (collectively, Sabre) in Federal District Court for the Southern District of New York. The lawsuit alleges, among other things, that Sabre has engaged in anticompetitive practices that illegally restrain US
Airways ability to distribute its products to its customers. The lawsuit also alleges that these actions have prevented US Airways from employing new competing technologies and have allowed Sabre to continue to charge US Airways
supracompetitive fees. The lawsuit seeks both injunctive relief and money damages. Sabre filed a motion to dismiss the case, which the court denied in part and granted in part in September 2011, allowing two of the four counts in the complaint to
proceed. The Company intends to pursue its claims against Sabre vigorously, but there can be no assurance of the outcome of this litigation.

On March 1, 2013, a putative class action lawsuit captioned Plumbers & Steamfitters Local Union No. 248 Pension Fund v. US Airways Group, Inc., et al., No. CV2013-051605 was filed in
the Superior Court of the State of Arizona in Maricopa County. On July 3, 2013, a Second Amended Complaint was filed in the above-referenced action, captioned Dennis Palkon, et al. v. US Airways Group, Inc., et al., No. CV2013-051605. The
complaint names as defendants US Airways Group and the members of its board of directors, and alleges that the directors breached their fiduciary duties in connection with the Merger by failing to maximize the value of US Airways Group and ignoring
or failing to protect against conflicts of interest, and that US Airways Group aided and abetted those breaches of fiduciary duty. The complaint seeks a declaration that the Merger Agreement is unenforceable, an injunction against the Merger,
or rescission in the event it has been consummated, imposition of a constructive trust, an award of fees and costs, including attorneys and experts fees, and other relief. On June 20, 2013, the plaintiff in the above-referenced
action moved for a temporary restraining order seeking to temporarily enjoin the Company Annual Meeting of Stockholders. On June 25, 2013, the court in the above-referenced action entered an order denying the plaintiffs motion for a
temporary restraining order. The Company believes this lawsuit is without merit and intends to vigorously defend against the allegations.

On July 2, 2013, a lawsuit captioned Carolyn Fjord, et al., v. US Airways Group, Inc., et al., No. 13-3041-SBA was filed in the United States District Court for the Northern District of
California. The complaint names as defendants US Airways Group, Inc. and US Airways, Inc., and alleges that the effect of the Merger may be to substantially lessen competition, or tend to create a monopoly, in the transportation of airline
passengers in the United States and certain submarkets and in violation of Section 7 of the Clayton Antitrust Act, 15 U.S.C. Section 18. The complaint seeks a declaration that the Merger Agreement violates Section 7 of the Clayton
Antitrust Act, an injunction against the Merger, or divestiture, an award of fees and costs, including attorneys fees, and other relief. The Company believes this lawsuit is without merit and intends to vigorously defend against the
allegations.

The Company and/or its subsidiaries are defendants in various other pending lawsuits and proceedings, and from
time to time are subject to other claims arising in the normal course of its business, many of which are covered in whole or in part by insurance. The outcome of those matters cannot be predicted with certainty at this time, but the Company, having
consulted with outside counsel, believes that the ultimate disposition of these contingencies will not materially affect its consolidated financial position or results of operations.

9. Subsequent Event

In July 2013, the Company repaid in full the Barclays prepaid miles at their face amount of $200 million plus accrued
interest.

The accompanying unaudited condensed financial statements of US Airways, Inc. (US Airways) should be read
in conjunction with the consolidated financial statements contained in US Airways Annual Report on Form 10-K for the year ended December 31, 2012. US Airways is a wholly owned subsidiary of US Airways Group, Inc. (US Airways
Group).

Management believes that all adjustments necessary for the fair presentation of results, consisting of normally
recurring items, have been included in the unaudited condensed financial statements for the interim periods presented. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results
could differ from those estimates. The most significant areas of judgment relate to passenger revenue recognition, impairment of long-lived and intangible assets, the frequent traveler program and the deferred tax asset valuation allowance. US
Airways accumulated other comprehensive income balances at June 30, 2013 and December 31, 2012 related to other postretirement benefits.

2. Merger Agreement

On February 13, 2013, AMR Corporation, a Delaware corporation (AMR), US Airways Group, and AMR Merger
Sub, Inc., a Delaware corporation and wholly owned subsidiary of AMR (Merger Sub), entered into an Agreement and Plan of Merger (as subsequently amended, the Merger Agreement), providing for a business combination of AMR and
US Airways Group. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into US Airways Group (the Merger), with US Airways Group as the
surviving corporation and as a wholly owned subsidiary of AMR. The Merger Agreement and the transactions contemplated thereby are to be effected pursuant to a plan of reorganization of AMR and certain of its direct and indirect domestic subsidiaries
(the Debtors) in connection with their currently pending cases under Chapter 11 of Title 11 of U.S. Code, 11 U.S.C. Sections 101 et seq. (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of
New York (the Bankruptcy Court). AMRs plan of reorganization is subject to confirmation by the Bankruptcy Court in accordance with the requirements of the Bankruptcy Code. Consummation of the Merger is subject to confirmation of
AMRs plan of reorganization and other customary closing conditions, including certain regulatory approvals. The Merger was approved by US Airways Groups shareholders on July 12, 2013.

3. Special Items, Net

Special items, net as shown on the condensed statements of operations included the following charges for the three and
six months ended June 30, 2013 and 2012 (in millions):

Three MonthsEnded June
30,

Six
MonthsEnded June 30,

2013

2012

2013

2012

Special items, net (a)

$

24

$

9

$

63

$

11

(a)

The 2013 second quarter consisted primarily of merger related costs. The 2013 six month period consisted primarily of merger related costs and charges related to the
ratification of the US Airways flight attendant collective bargaining agreement.

The 2012 second quarter and
six month periods consisted primarily of merger related and auction rate securities arbitration costs.

In addition, other
nonoperating, net in the second quarter of 2013 included $2 million primarily related to special debt extinguishment charges due to non-cash write offs of debt issuance costs. Other nonoperating, net in the six month period of 2013 included a $30
million special credit in connection with an award received in an arbitration related to previous investments in auction rate securities, offset in part by $2 million in special charges primarily related to debt extinguishment costs discussed above.

Other nonoperating, net in the second quarter of 2012 included $3 million in special charges
for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft. Other nonoperating, net in the six month period of 2012 included a $73 million special gain related to the slot
transaction with Delta Air Lines, Inc., offset in part by $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs discussed above.

4. Debt

The following table details US Airways debt (in millions). Variable interest rates listed are the rates as of
June 30, 2013.

Other secured obligations, fixed interest rate of 8%, maturing from 2018 to 2021

26

27

5,052

3,303

Unsecured

Airbus advance, repayments through 2018

90

83

Industrial development bonds, fixed interest rate of 6.30%, interest only payments until due in 2023

29

29

119

112

Total long-term debt and capital lease obligations

5,171

3,415

Less: Total unamortized discount on debt

(57

)

(62

)

Current maturities

(380

)

(401

)

Long-term debt and capital lease obligations, net of current maturities

$

4,734

$

2,952

US Airways was in compliance with the covenants in its debt agreements at June 30, 2013.

2013 Citicorp Credit Facility

On May 23, 2013, US Airways entered into a term loan credit facility (the 2013 Citicorp credit facility) with Citicorp North America, Inc., as administrative agent, and a syndicate of
lenders pursuant to which US Airways borrowed an aggregate principal amount of $1.6 billion. Approximately $1.3 billion of the net proceeds were applied to repay US Airways Groups former Citicorp North America loan and certain other
secured debt of US Airways with remaining net proceeds to be used for general corporate purposes. As a result of the repayment of this loan, US Airways recorded approximately $2 million in special debt extinguishment charges which are included
within other nonoperating expense, net on the accompanying condensed statement of operations. US Airways Group and certain other subsidiaries of US Airways Group are guarantors of the 2013 Citicorp credit facility.

The 2013 Citicorp credit facility consists of $1.0 billion of tranche B-1 term loans (Tranche B-1) and $600 million of
tranche B-2 term loans (Tranche B-2). The 2013 Citicorp credit facility is prepayable at any time with a premium of 1% applicable to certain prepayments made prior to November 23, 2013.

The 2013 Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at US Airways option, LIBOR
(subject to a floor) plus an applicable LIBOR margin. The applicable index margin for Tranche B-1 and Tranche B-2 is 2.25% and 1.50%, respectively. The applicable LIBOR margin for Tranche B-1 and Tranche B-2 is 3.25% and 2.50%, respectively. The
applicable index and LIBOR margins are subject to a step down of 0.25% upon the consummation of the Merger. As of June 30, 2013, the interest rate was 4.25% based on a 3.25% LIBOR margin for Tranche B-1 and 3.50% based on a 2.50% LIBOR margin
for Tranche B-2.

Tranche B-1 and Tranche B-2 mature on May 23, 2019 and November 23, 2016, respectively, and each
is repayable in annual installments to be paid on each anniversary of the closing date in an amount equal to 1% of the initial aggregate principal amount of the loans with any unpaid balance due on the maturity date of the respective tranche.

The obligations of US Airways under the 2013 Citicorp credit facility are secured by liens
on certain route authorities to operate between certain specified cities, certain take-off and landing rights at certain airports and certain other assets of US Airways.

Upon consummation of the Merger, AMR (or its successor) and American Airlines, Inc. will be required to join the 2013 Citicorp credit facility as obligors, at which time certain dollar-limited exceptions
to restrictive covenants and certain cross-default thresholds will automatically be increased.

The 2013 Citicorp credit
facility includes covenants that, among other things, (a) require US Airways to maintain (i) unrestricted liquidity of not less than $850 million prior to the Merger and AMR (or its successor) to maintain unrestricted liquidity of not
less than $2 billion following the Merger, in both cases with not less than $750 million held in accounts subject to control agreements, and (ii) a minimum ratio of appraised value of collateral to the outstanding loans under the facility
of 1.5 to 1.0 and (b) restrict the ability of US Airways Group and its subsidiaries party to the 2013 Citicorp credit facility (and after the Merger AMR, or its successor, and its subsidiaries party to the 2013 Citicorp credit facility) to make
certain investments and restricted payments. The 2013 Citicorp credit facility contains events of default customary for similar financings, including a cross-acceleration provision to certain other material indebtedness of US Airways and the
guarantors.

2013-1 EETCs

In April 2013, US Airways created two pass-through trusts which issued approximately $820 million aggregate face amount of Series 2013-1 Class A and Class B EETCs in connection with the financing of
18 Airbus aircraft scheduled to be delivered from September 2013 to June 2014. The 2013-1 EETCs represent fractional undivided interests in the respective pass-through trusts and are not obligations of US Airways. Proceeds received from the sale of
EETCs are initially held by a depository in escrow for the benefit of the certificate holders until US Airways issues equipment notes to the trust, which purchases the notes with a portion of the escrowed funds. These escrowed funds are not
guaranteed by US Airways and are not reported as debt on US Airways condensed balance sheet because the proceeds held by the depository are not US Airways assets. The escrowed proceeds will be used to purchase Series A and Series B
equipment notes as the new aircraft are delivered. The Series A equipment notes will bear interest at 3.95% per annum with a final expected distribution date of November 2025. The Series B equipment notes will bear interest at 5.375% per
annum with a final expected distribution date of November 2021. The equipment notes will be obligations of US Airways and will be unconditionally guaranteed by US Airways Group.

2012-2 EETCs

In June 2013, US Airways created a new pass-through trust and issued a new class of its US Airways Pass Through Certificates, Series 2012-2: Class C in the aggregate face amount of $100 million. US
Airways previously issued two classes of US Airways Pass Through Certificates, Series 2012-2: Class A and Class B, pursuant to separate trusts established for each of the Class A certificates and Class B certificates at the time of the
issuance thereof in December 2012.

In the second quarter of 2013, US Airways issued $345 million of equipment notes in three
series under its 2012-2 EETCs: Series A equipment notes in the amount of $223 million bearing interest at 4.625% per annum, Series B equipment notes in the amount of $69 million bearing interest at 6.75% per annum and Series C equipment
notes in the amount of $53 million bearing interest at 5.45% per annum. Interest on the equipment notes is payable semiannually in June and December of each year and began in June 2013 for Series A and Series B, and will begin in December 2013
for Series C. Principal payments on the Series A and Series B equipment notes are scheduled to begin in December 2013. The final payments on the Series A equipment notes, Series B equipment notes and Series C equipment notes will be due in June
2025, June 2021 and June 2018, respectively. US Airways payment obligations under the equipment notes are fully and unconditionally guaranteed by US Airways Group. The only principal payments due on the Series C equipment notes are the
principal payments that will be due on the final payment date. The net proceeds from the issuance of these equipment notes were used to finance six Airbus aircraft delivered in May 2013 through June 2013. The equipment notes are secured by liens on
aircraft.

In the first quarter of 2013, US Airways issued $183 million of equipment notes in three series under its 2012-1 EETCs completed in May
2012: Series A equipment notes in the amount of $111 million bearing interest at 5.90% per annum, Series B equipment notes in the amount of $37 million bearing interest at 8% per annum and Series C equipment notes in the amount of $35
million bearing interest at 9.125% per annum. The equipment notes are secured by liens on aircraft.

In the third quarter
of 2012, US Airways entered into an agreement to acquire five Embraer 190 aircraft from Republic Airline, Inc. (Republic). US Airways took delivery of three aircraft in 2012 and the remaining two aircraft in the first quarter of 2013. In
connection with this agreement, US Airways assumed the outstanding debt on these aircraft upon delivery and Republic was released from its obligations associated with the principal due under the debt.

Fair Value of Debt

The carrying value and estimated fair value of US Airways long-term debt was (in millions):

June 30, 2013

December 31, 2012

CarryingValue

FairValue

CarryingValue

FairValue

Long-term debt, including current maturities

$

5,114

$

5,198

$

3,353

$

3,304

The fair values were estimated using quoted market prices where available. For long-term debt not
actively traded, fair values were estimated using a discounted cash flow analysis based on US Airways current incremental borrowing rates for similar types of borrowing arrangements. If US Airways long-term debt was measured at fair
value, it would have been categorized as Level 2 in the fair value hierarchy.

5. Related Party Transactions

The following represents the net receivables from (payables to) related parties (in millions):

June 30,2013

December 31,2012

US Airways Group

$

197

$

(453

)

US Airways Groups wholly owned subsidiaries

(76

)

(68

)

$

121

$

(521

)

US Airways Group has the ability to move funds freely between its operating subsidiaries to support
operations. These transfers are recognized as intercompany transactions. The decrease in the intercompany payable to US Airways Group primarily resulted from the repayment of US Airways Groups former Citicorp North America term loan, offset in
part by proceeds from the issuance of US Airways Groups 6.125% Senior Notes.

The net payable to US Airways Groups
wholly owned subsidiaries consists of amounts due under regional capacity agreements with the other airline subsidiaries and fuel purchase arrangements with a non-airline subsidiary.

US Airways is part of the US Airways Group consolidated income tax return.

At December 31, 2012, gross net operating losses (NOLs) available for use by US Airways were approximately $1.4 billion for
federal income tax purposes. To the extent profitable, all of US Airways NOLs are expected to be available for use in 2013. US Airways will use these NOLs to reduce its cash tax obligations when profitable going forward. The NOLs expire during
the years 2025 through 2031. US Airways also had approximately $67 million of tax-effected state NOLs at December 31, 2012.

At December 31, 2012, US Airways was in a net deferred tax asset position for financial reporting purposes, which included the NOLs, and
was subject to a full valuation allowance. The federal and state valuation allowances were $126 million and $42 million, respectively, which included $32 million allocated primarily to certain federal capital loss carryforwards.

For each of the three and six months ended June 30, 2013, US Airways utilized NOLs to offset its taxable income. Historically,
utilization of NOLs reduced US Airways net deferred tax asset and in turn resulted in the release of its valuation allowance, which offset US Airways tax provision dollar for dollar. US Airways second quarter 2013 pre-tax income
resulted in the utilization of NOLs and US Airways remaining valuation allowance associated with federal income taxes. This release of valuation allowance offset only a portion of US Airways tax provision. Accordingly, in each of the
three and six months ended June 30, 2013, US Airways recorded $77 million of non-cash federal income tax expense and $1 million of state income tax expense related to certain states where NOLs were limited or unavailable to be used.

For each of the three and six months ended June 30, 2012, NOL usage and release of valuation allowance offset US Airways tax
provision. As a result, US Airways did not record federal income tax expense and recorded a nominal amount of state income tax expense related to certain states where NOLs were limited or unavailable to be used.

When profitable, US Airways is ordinarily subject to Alternative Minimum Tax (AMT). However as the result of a special tax
election made in 2009, US Airways was able to utilize AMT NOLs to fully offset its AMT taxable income for each of the three and six months ended June 30, 2013 and 2012.

7. Express Expenses

Expenses associated with affiliate regional airlines operating as US Airways Express are classified as express expenses
on the condensed statements of operations. Express expenses consist of the following (in millions):

US Airways is party to an arbitration proceeding relating to a grievance brought by its pilots union to the effect
that, annually since May 2010, this work group was entitled to an increase in wages by operation of the applicable collective bargaining agreement. The arbitrator has issued a decision in US Airways favor, and a subsequent meeting
requested by the union has been held with the arbitrator to address that decision. US Airways believes that the unions position is without merit and that the possibility of an adverse outcome is remote.

On April 21, 2011, US Airways filed an antitrust lawsuit against Sabre Holdings Corporation, Sabre Inc. and Sabre Travel
International Limited (collectively, Sabre) in Federal District Court for the Southern District of New York. The lawsuit alleges, among other things, that Sabre has engaged in anticompetitive practices that illegally restrain US
Airways ability to distribute its products to its customers. The lawsuit also alleges that these actions have prevented US Airways from employing new competing technologies and have allowed Sabre to continue to charge US Airways
supracompetitive fees. The lawsuit seeks both injunctive relief and money damages. Sabre filed a motion to dismiss the case, which the court denied in part and granted in part in September 2011, allowing two of the four counts in the complaint to
proceed. US Airways intends to pursue its claims against Sabre vigorously, but there can be no assurance of the outcome of this litigation.

On March 1, 2013, a putative class action lawsuit captioned Plumbers & Steamfitters Local Union No. 248 Pension Fund v. US Airways Group, Inc., et al., No. CV2013-051605 was filed in
the Superior Court of the State of Arizona in Maricopa County. On July 3, 2013, a Second Amended Complaint was filed in the above-referenced action, captioned Dennis Palkon, et al. v. US Airways Group, Inc., et al., No. CV2013-051605. The
complaint names as defendants US Airways Group and the members of its board of directors, and alleges that the directors breached their fiduciary duties in connection with the Merger by failing to maximize the value of US Airways Group and ignoring
or failing to protect against conflicts of interest, and that US Airways Group aided and abetted those breaches of fiduciary duty. The complaint seeks a declaration that the Merger Agreement is unenforceable, an injunction against the Merger,
or rescission in the event it has been consummated, imposition of a constructive trust, an award of fees and costs, including attorneys and experts fees, and other relief. On June 20, 2013, the plaintiff in the above-referenced
action moved for a temporary restraining order seeking to temporarily enjoin the Company Annual Meeting of Stockholders. On June 25, 2013, the court in the above-referenced action entered an order denying the plaintiffs motion for a
temporary restraining order. US Airways Group believes this lawsuit is without merit and intends to vigorously defend against the allegations.

On July 2, 2013, a lawsuit captioned Carolyn Fjord, et al., v. US Airways Group, Inc., et al., No. 13-3041-SBA was filed in the United States District Court for the Northern District of
California. The complaint names as defendants US Airways Group, Inc. and US Airways, Inc., and alleges that the effect of the Merger may be to substantially lessen competition, or tend to create a monopoly, in the transportation of airline
passengers in the United States and certain submarkets and in violation of Section 7 of the Clayton Antitrust Act, 15 U.S.C. Section 18. The complaint seeks a declaration that the Merger Agreement violates Section 7 of the Clayton
Antitrust Act, an injunction against the Merger, or divestiture, an award of fees and costs, including attorneys fees, and other relief. US Airways believes this lawsuit is without merit and intends to vigorously defend against the
allegations.

US Airways is a defendant in various other pending lawsuits and proceedings, and from time to time is subject to
other claims arising in the normal course of its business, many of which are covered in whole or in part by insurance. The outcome of those matters cannot be predicted with certainty at this time, but US Airways, having consulted with outside
counsel, believes that the ultimate disposition of these contingencies will not materially affect its financial position or results of operations.

Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations

Part I, Item 2 of this report should be read in conjunction with Part II, Item 7 of US
Airways Groups and US Airways Annual Report on Form 10-K for the year ended December 31, 2012 (the 2012 Form 10-K). The information contained herein is not a comprehensive discussion and analysis of the financial
condition and results of operations of the Company, but rather updates disclosures made in the 2012 Form 10-K.

Background

US Airways Group is a holding company whose primary business activity is the operation of a major network air carrier through its wholly
owned subsidiaries US Airways, Piedmont Airlines, Inc. (Piedmont), PSA Airlines, Inc. (PSA), Material Services Company, Inc. (MSC) and Airways Assurance Limited (AAL).

We operate the fifth largest airline in the United States as measured by domestic revenue passenger miles (RPMs) and
available seat miles (ASMs). We have hubs in Charlotte, Philadelphia, Phoenix and Washington, D.C. at Ronald Reagan Washington National Airport. We offer scheduled passenger service on more than 3,100 flights daily to 198 communities in
the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America. We also have an established East Coast route network, including the US Airways Shuttle service. For the six months ended June 30, 2013, we
had approximately 28 million passengers boarding our mainline flights. As of June 30, 2013, we operated 346 mainline jets and were supported by our regional airline subsidiaries and affiliates operating as US Airways Express under capacity
purchase agreements, which operated 238 regional jets and 43 turboprops. Our prorate carriers operated four regional jets at June 30, 2013.

Merger Agreement with AMR Corporation; Tax Benefit Preservation Plan

On
February 13, 2013, AMR, US Airways Group, and AMR Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of AMR (Merger Sub), entered into an Agreement and Plan of Merger (as subsequently amended, the Merger
Agreement), providing for a business combination of AMR and US Airways Group. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into US Airways
Group (the Merger), with US Airways Group as the surviving corporation and as a wholly owned subsidiary of AMR. The Merger Agreement and the transactions contemplated thereby are to be effected pursuant to a plan of reorganization of AMR
and certain of its direct and indirect domestic subsidiaries (the Debtors) in connection with their currently pending cases under Chapter 11 of Title 11 of U.S. Code, 11 U.S.C. Sections 101 et seq. (the Bankruptcy Code) in
the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). AMRs plan of reorganization is subject to confirmation by the Bankruptcy Court in accordance with the requirements of the Bankruptcy
Code. Consummation of the Merger is subject to confirmation of AMRs plan of reorganization and other customary closing conditions, including certain regulatory approvals. The Merger was approved by US Airways Groups shareholders on
July 12, 2013. The foregoing description of the Merger Agreement is not a complete description of all of the parties rights and obligations under the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement,
which is filed as Exhibit 2.1 to the 2012 Form 10-K. For additional information about the Merger and the Merger Agreement, see US Airways Groups Definitive Proxy Statement on Schedule 14A, which was filed with the SEC on June 10, 2013.

In conjunction with execution of the Merger Agreement, US Airways Group also adopted a tax benefit preservation plan designed
to help preserve the value of the net operating losses and other deferred tax benefits of US Airways Group and the combined enterprise resulting from the Merger with AMR. As part of the plan, the US Airways Groups board of directors declared a
dividend of one common stock purchase right, which are referred to as rights, for each outstanding share of US Airways Group common stock. The rights will be exercisable if a person or group, without the approval of the US Airways Group
board or other permitted exception, acquires beneficial ownership of 4.9% or more of US Airways Groups outstanding common stock. The rights also will be exercisable if a person or group that already beneficially owns 4.9% or more of the common
stock of US Airways Group, without board approval or other permitted exception, acquires additional shares (other than as a result of a dividend or a stock split). US Airways Group stockholders with ownership positions near or above the 4.9%
threshold specified in the tax benefit preservation plan are urged to review its terms carefully. The foregoing description of the tax benefit preservation plan is not a complete description of all of the parties rights and obligations under
the plan and is qualified in its entirety by reference to the Tax Benefit Preservation Plan, which is filed as Exhibit 4.10 to the 2012 Form 10-K.

During the second quarter of 2013, the U.S. airline industry experienced strong load factors driven by continued capacity discipline and consumer demand for air travel. Yields decreased as compared to the
second quarter of 2012 due to more difficult year-over-year comparisons. Reduced demand for corporate business travel as well as the U.S. government sequester, which drove a decline in government business travel, also contributed to the lower
yields.

In its most recent data available, Airlines for America, the trade association for U.S. airlines, reported the
following changes in U.S. industry passenger revenues and yields.

2013 vs. 2012

April

May

June

Passenger Revenues

(1.9

)%

0.4

%

3.0

%

Yields

(1.8

)%

(1.6

)%

1.0

%

2012 vs. 2011

April

May

June

Passenger Revenues

7.1

%

4.5

%

5.5

%

Yields

5.9

%

4.4

%

4.7

%

Jet fuel prices continue to follow the price of Brent crude oil more closely than the price of West Texas
Intermediate crude oil. On average, fuel costs were down slightly in the second quarter of 2013. The average daily spot price for Brent crude oil during the second quarter of 2013 was $103 per barrel as compared to an average daily spot price of
$108 per barrel during the second quarter of 2012. On a daily basis, Brent crude oil prices fluctuated between a high of $110 per barrel to a low of $97 per barrel in April and closed the quarter at $102 per barrel on June 28, 2013.

While the U.S. airline industry experienced moderating fuel prices in the second quarter of 2013 as described above, fuel prices remain
volatile and subject to uncertainty, principally unrest in the Middle East. Since June 28, 2013, the daily spot price for Brent Crude oil has increased and averaged $107 per barrel through July 22, 2013. See Part II, Item 1A, Risk Factors
 Downturns in economic conditions adversely affect our business and Our business is dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased fuel prices
and significant disruptions in the supply of aircraft fuel could have a significant negative impact on our operating results and liquidity.

US Airways Group

In the second quarter of 2013, we realized record
operating income of $481 million and income before income taxes of $354 million, driven by our largest reported operating revenues in the Companys history. Net income for the quarter was $287 million which included a $65 million non-cash
federal income tax provision. This compares to operating income of $404 million and income before income taxes and net income, each in the amount of $306 million, in the second quarter of 2012. There was no tax provision in the second quarter of
2012.

Our second quarter 2013 results also included net special charges of $55 million compared to $15 million of net special
charges in the second quarter of 2012. Special charges in the second quarter of 2013 consisted primarily of merger related costs and non-cash debt extinguishment charges. Excluding the effects of net special charges, we recognized record income
before income taxes of $409 million and record net income of $324 million. This compares to income before income taxes and net income, each in the amount of $321 million, in the second quarter of 2012. See US Airways Groups Results of
Operations included in Part I, Item 2 of this report for more information on net special items.

Capacity

Total system capacity for the second quarter of 2013 increased 3.4% as compared to the second quarter of 2012
primarily due to larger gauge aircraft replacing smaller legacy 737 aircraft and more international long haul flying. For the full year, total system capacity is expected to be up approximately 3.5% due to larger gauge aircraft as well as more
international long haul flying. Domestic capacity is expected to be up approximately 3.8% and international is expected to be up approximately 3.2% versus 2012.

In the second quarter of 2013, we reported record operating revenues of $3.87 billion. Mainline and express passenger revenues increased $86 million, or 2.6%, as compared to the 2012 period. Our increase
in capacity coupled with record load factors more than offset decreases in yield. Revenue passenger miles increased 5.6%, as total capacity increased 3.4% as compared to 2012, resulting in a 1.7 point increase in load factor to a record 85.1%. Our
mainline and express passenger revenue per available seat mile (PRASM) was 14.47 cents in the second quarter of 2013, a 0.9% decrease, as compared to 14.59 cents in the 2012 period. Total revenue per available seat mile
(RASM) was 16.22 cents in the second quarter of 2013, a 0.5% decrease, as compared to 16.30 cents in the 2012 period. Total revenues include our ancillary revenue initiatives, which generated $166 million in revenues for the second
quarter of 2013, an increase of $11 million over the 2012 period principally related to an increase in the volume of checked bag fees as well as our Choice Seats and PreferredAccess programs.

Fuel

Mainline and express fuel expense was $1.13 billion for the
second quarter of 2013, which was $55 million, or 4.6%, lower as compared to the second quarter of 2012. A 7.8% decrease in the average price per gallon to $2.93 for the second quarter of 2013 from an average price per gallon of $3.18 for the second
quarter of 2012 was offset in part by a 3.5% increase in consumption driven by a 3.4% increase in system capacity as discussed above. We have not entered into any transactions to hedge our fuel consumption.

Cost Control

We
remain committed to maintaining a low cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: the health of the economy and the price of fuel. Our mainline
costs per available seat mile (CASM) excluding special items, fuel and profit sharing decreased 0.04 cents, or 0.4%, from 8.25 cents in the second quarter of 2012 to 8.21 cents in the second quarter of 2013.

The following table details our mainline CASM for the three months ended June 30, 2013 and 2012:

We believe that the presentation of mainline CASM excluding fuel is useful to investors as both the cost and availability of fuel are subject to many economic and
political factors beyond our control, and excluding special items and profit sharing provides investors the ability to measure financial performance in a way that is more indicative of our ongoing performance and is more comparable to measures
reported by other major airlines. Management uses mainline CASM excluding special items, fuel and profit sharing to evaluate our operating performance. Amounts may not recalculate due to rounding.

We are committed to consistently delivering safe, reliable and convenient service to our customers in every aspect of our operation. Our second quarter 2013 operating performance was negatively impacted
by more severe weather conditions as compared to the second quarter of 2012. Additionally, the month of April 2013 was impacted by operational challenges created by the sequester-related furloughs of Federal Aviation Administration employees.

We reported the following operating statistics to the Department of Transportation (DOT) for mainline operations
for the second quarter of 2013 and 2012.

2013

2012

Better (Worse) 2013-2012

April

May

June (e)

April

May

June

April

May

June

On-time performance (a)

81.0

82.0

73.0

90.6

85.5

86.2

(9.6

) pts

(3.5

) pts

(13.2

) pts

Completion factor (b)

99.2

99.4

98.6

99.7

99.5

99.1

(0.5

) pts

(0.1

) pts

(0.5

) pts

Mishandled baggage (c)

2.14

2.17

3.09

1.83

2.02

2.23

(16.9

)%

(7.4

)%

(38.6

)%

Customer complaints (d)

1.65

1.25

1.75

1.78

2.28

2.50

7.3

%

45.2

%

30.0

%

(a)

Percentage of reported flight operations arriving on time as defined by the DOT.

(b)

Percentage of scheduled flight operations completed.

(c)

Rate of mishandled baggage reports per 1,000 passengers.

(d)

Rate of customer complaints filed with the DOT per 100,000 enplanements.

(e)

June 2013 operating statistics are preliminary as the DOT has not issued its June 2013 Air Travel Consumer Report as of the date of this filing.

Liquidity Position

As of June 30, 2013, our total cash, cash equivalents, investments in marketable securities and restricted cash was $3.97 billion, of which $350 million was restricted.

The improvement in our liquidity in the first six months of 2013 was due in part to our record
profitability thus far in 2013. We also completed financing transactions in the second quarter which generated approximately $750 million of net proceeds. These transactions included the issuance of $500 million aggregate principal 6.125% Senior
Notes and the issuance of a new $1.6 billion term loan. Approximately $1.3 billion of the net proceeds from the new term loan were applied to repay our former Citicorp North America term loan and certain other higher cost secured debt.

Long-term restricted cash primarily includes cash collateral to secure workers compensation claims and credit card processing
holdback requirements for advance ticket sales for which US Airways has not yet provided air transportation.

In the three months ended June 30, 2013, we realized record operating income of $481 million and income before income taxes of $354
million, driven by our largest reported operating revenues in the Companys history. Net income for the quarter was $287 million which included a $65 million non-cash federal income tax provision. This compares to operating income of $404
million and income before income taxes and net income, each in the amount of $306 million, in the second quarter of 2012. There was no tax provision in the second quarter of 2012.

Our second quarter 2013 results included net special charges of $55 million, while the second quarter of 2012 included $15 million of net
special charges. Excluding the effects of net special charges, we recognized record income before income taxes of $409 million and record net income of $324 million. This compares to income before income taxes and net income, each in the amount of
$321 million, in the second quarter of 2012.

In the six months ended June 30, 2013, we realized operating income of $584
million and income before income taxes of $398 million. Net income in the 2013 six month period was $331 million which included a $65 million non-cash federal income tax provision. This compares to operating income of $463 million and income before
income taxes and net income, each in the amount of $355 million, in the 2012 period. There was no tax provision in the 2012 six month period.

Our 2013 six month period results included net special charges of $66 million, while the 2012 six month period included $56 million of net special credits. Excluding the effects of net special items, we
recognized income before income taxes of $464 million and net income of $379 million. This compares to income before income taxes and net income, each in the amount of $299 million, in 2012 six month period.

The following table details our income before income taxes and net income excluding special items (in millions):

Three Months EndedJune
30,

Six Months EndedJune
30,

2013

2012

2013

2012

Income before income taxes

$

354

$

306

$

398

$

355

Special items:

Mainline operating special items, net (a)

24

9

63

11

Express operating special items, net



3

2

3

Nonoperating special items, net (b)

31

3

1

(70

)

Total special items

55

15

66

(56

)

Income before income taxes excluding special items

$

409

$

321

$

464

$

299

Net income

$

287

$

306

$

331

$

355

Total special items

55

15

66

(56

)

Net tax effect of special items

(18

)



(18

)



Net income excluding special items

$

324

$

321

$

379

$

299

(a)

The 2013 second quarter consisted primarily of merger related costs. The 2013 six month period consisted primarily of merger related costs and charges related to the
ratification of the US Airways flight attendant collective bargaining agreement.

The 2012 second quarter and six
month periods consisted primarily of merger related and auction rate securities arbitration costs.

(b)

The 2013 second quarter consisted of $31 million primarily related to debt extinguishment charges due to non-cash write offs of debt discount and debt issuance costs in
connection with conversions of our 7.25% convertible senior notes and repayment of the former Citicorp North America term loan. The 2013 six month period consisted of $31 million in charges primarily related to debt extinguishment costs discussed
above, offset in part by a $30 million credit in connection with an award received in an arbitration related to previous investments in auction rate securities.

The 2012 second quarter consisted of debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft. The 2012 six month period consisted
of a $73 million gain related to the slot transaction with Delta Air Lines, Inc. (Delta), offset in part by the $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs discussed above.

At December 31, 2012, gross net operating losses (NOLs) available for use by us
were approximately $1.5 billion for federal income tax purposes. To the extent profitable, all of our NOLs are expected to be available for use in 2013. We will use these NOLs to reduce our cash tax obligations when profitable going forward. The
NOLs expire during the years 2025 through 2031.

At December 31, 2012, we were in a net deferred tax asset position for
financial reporting purposes, which included the NOLs, and was subject to a full valuation allowance. The federal and state valuation allowances were $118 million and $42 million, respectively, which included $32 million allocated primarily to
certain federal capital loss carryforwards.

For each of the three and six months ended June 30, 2013, we utilized NOLs to
offset our taxable income. Historically, utilization of NOLs reduced our net deferred tax asset and in turn resulted in the release of our valuation allowance, which offset our tax provision dollar for dollar. Our second quarter 2013 pre-tax
income resulted in the utilization of NOLs and our remaining valuation allowance associated with federal income taxes. This release of valuation allowance offset only a portion of our tax provision. Accordingly, in each of the three and six months
ended June 30, 2013, we recorded $65 million of non-cash federal income tax expense and $2 million of state income tax expense related to certain states where NOLs were limited or unavailable to be used. As of June 30, 2013, we had approximately
$1.1 billion of NOLs remaining for federal income tax purposes.

For each of the three and six months ended June 30,
2012, NOL usage and release of valuation allowance offset our tax provision. As a result, we did not record federal income tax expense and recorded a nominal amount of state income tax expense related to certain states where NOLs were limited or
unavailable to be used.

When profitable, we are ordinarily subject to Alternative Minimum Tax (AMT). However as
the result of a special tax election made in 2009, we were able to utilize AMT NOLs to fully offset our AMT taxable income for each of the three and six months ended June 30, 2013 and 2012.

Passenger enplanements  The number of passengers on board an aircraft, including local, connecting and through passengers.

(h)

Block hours  The hours measured from the moment an aircraft first moves under its own power, including taxi time, for the purposes of flight until the
aircraft is docked at the next point of landing and its power is shut down.

(i)

Average stage length  The average of the distances flown on each segment of every route.

(j)

Average passenger journey  The average one-way trip measured in miles for one passenger origination.

Total operating revenues in the second quarter of 2013 were $3.87 billion as compared to $3.75 billion in
the 2012 period, an increase of $111 million, or 2.9%. Our increase in capacity coupled with record passenger load factors more than offset decreases in yield, and we reported our highest quarterly operating revenues in our Companys history.
Significant changes in the components of operating revenues are as follows:



Mainline passenger revenues were $2.57 billion in the second quarter of 2013 as compared to $2.45 billion in the 2012 period. Mainline RPMs increased 5.9% as mainline
capacity, as measured by ASMs, increased 4.2%, resulting in a 1.4 point increase in load factor to a record 86.0%. Mainline passenger yield decreased 0.9% to 14.77 cents in the second quarter of 2013 from 14.91 cents in the 2012 period. Mainline
PRASM increased 0.7% to 12.71 cents in the second quarter of 2013 from 12.62 cents in the 2012 period.



Express passenger revenues were $882 million in the second quarter of 2013 as compared to $916 million in the 2012 period. Express RPMs increased 3.5% as express
capacity, as measured by ASMs, decreased 0.3%, resulting in a 3.0 point increase in load factor to a record 79.8%. Express passenger yield decreased 7.0% to 30.39 cents in the second quarter of 2013 from 32.68 cents in the 2012 period. Express PRASM
decreased 3.4% to 24.25 cents in the second quarter of 2013 from 25.10 cents in the 2012 period.



Other revenues were $381 million in the second quarter of 2013, an increase of $28 million, or 7.6%, from the 2012 period. The increase in other revenues was driven
primarily by an increase in the volume of passenger ticketing change fees and checked bag fees as well as the PreferredAccess program.

Total operating expenses were $3.38 billion in the second quarter of 2013, an increase of $34 million, or
1.0%, compared to the 2012 period.

Mainline Operating Expenses per ASM:

Our mainline CASM decreased 0.26 cents, or 2.0%, from 13.14 cents in the second quarter of 2012 to 12.88 cents in the second quarter of
2013. Excluding special items, fuel and profit sharing our mainline CASM decreased 0.04 cents, or 0.4%, from 8.25 cents in the second quarter of 2012 to 8.21 cents in the second quarter of 2013, while mainline capacity increased 4.2%.

The table below sets forth the major components of our total mainline CASM and our mainline CASM excluding special items, fuel and profit
sharing for the three months ended June 30, 2013 and 2012:

We believe that the presentation of mainline CASM excluding fuel is useful to investors as both the cost and availability of fuel are subject to many economic and
political factors beyond our control, and excluding special items and profit sharing provides investors the ability to measure financial performance in a way that is more indicative of our ongoing performance and is more comparable to measures
reported by other major airlines. Management uses mainline CASM excluding special items, fuel and profit sharing to evaluate our operating performance. Amounts may not recalculate due to rounding.

Significant changes in the components of mainline operating expense per ASM are as follows:



Aircraft fuel and related taxes per ASM decreased 7.7% primarily due to a 7.9% decrease in the average price per gallon of fuel to $2.92 in the second quarter of 2013
from $3.17 in the 2012 period.



Aircraft rent per ASM decreased 9.0% due to recent lease extensions at lower average rental rates as well as a decrease in the average number of leased aircraft in the
second quarter 2013 as compared to the 2012 period.



Other rent and landing fees per ASM increased 15.0% primarily due to rate increases at certain domestic airport locations, as well as the timing of receipt of a rent
credit for one of our hubs in the second quarter of 2012.



Depreciation and amortization per ASM increased 8.9% primarily due to an increase in owned aircraft driven by the acquisition of 20 Airbus aircraft since the second
quarter of 2012.

Express Operating Expenses:

Total express expenses decreased $20 million, or 2.5%, in the second quarter of 2013 to $783 million from $803 million in the 2012 period.
The period-over-period decrease was primarily due to a $21 million, or 7.3%, decrease in fuel costs. The average price per gallon of fuel decreased 7.7% to $2.96 in the second quarter of 2013 from $3.20 in the 2012 period, on a 0.4% increase in
consumption.

Nonoperating Income (Expense):

2013

2012

PercentIncrease(Decrease)

(In millions)

Nonoperating income (expense):

Interest income

$

1

$



58.6

Interest expense, net

(90

)

(85

)

6.2

Other, net

(38

)

(13

)

nm

Total nonoperating expense, net

$

(127

)

$

(98

)

30.1

Other nonoperating expense of $38 million in the second quarter of 2013 consisted primarily of $31
million in special charges principally related to non-cash write offs of debt discount and debt issuance costs in connection with conversions of our 7.25% convertible senior notes and repayment of the former Citicorp North America term loan. We also
incurred $5 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the second quarter of 2013.

Other nonoperating expense of $13 million in the second quarter of 2012 consisted primarily of $10 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the
second quarter of 2012 and $3 million in special charges for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft.

Total operating revenues in the first six months of 2013 were $7.25 billion as compared to $7.02 billion
in the 2012 period, an increase of $224 million, or 3.2%. Significant changes in the components of operating revenues are as follows:



Mainline passenger revenues were $4.76 billion in the first six months of 2013 as compared to $4.56 billion in the 2012 period. Mainline RPMs increased 5.1% as mainline
capacity, as measured by ASMs, increased 2.8%, resulting in a 1.9 point increase in load factor to 84.6%. Mainline passenger yield decreased 0.6% to 14.76 cents in the first six months of 2013 from 14.86 cents in the 2012 period. Mainline PRASM
increased 1.5% to 12.48 cents in the first six months of 2013 from 12.30 cents in the 2012 period.



Express passenger revenues were $1.64 billion in the first six months of 2013 as compared to $1.68 billion in the 2012 period. Express RPMs increased 4.6% as express
capacity, as measured by ASMs, increased 0.2%, resulting in a 3.3 point increase in load factor to 77.6%. Express passenger yield decreased 6.7% to 29.78 cents in the first six months of 2013 from 31.92 cents in the 2012 period. Express PRASM
decreased 2.6% to 23.12 cents in the first six months of 2013 from 23.73 cents in the 2012 period.



Other revenues were $765 million in the first six months of 2013, an increase of $65 million, or 9.3%, from the 2012 period. The increase in other revenues was driven
primarily by higher revenues associated with our frequent flyer program, including increased mileage sales to business partners, an increase in the volume of passenger ticketing change fees and checked bag fees as well as the PreferredAccess
program.

Total operating expenses were $6.66 billion in the first six months of 2013, an increase of $103 million,
or 1.6%, compared to the 2012 period.

Mainline Operating Expenses per ASM:

Our mainline CASM decreased 0.03 cents, or 0.2%, from 13.35 cents in the first six months of 2012 to 13.32 cents in the first six months
of 2013. Excluding special items, fuel and profit sharing our mainline CASM increased 0.01 cents, or 0.1%, from 8.47 cents in the first six months of 2012 to 8.48 cents in the first six months of 2013, while mainline capacity increased 2.8%.

The table below sets forth the major components of our total mainline CASM and our mainline CASM excluding special items,
fuel and profit sharing for the six months ended June 30, 2013 and 2012:

We believe that the presentation of mainline CASM excluding fuel is useful to investors as both the cost and availability of fuel are subject to many economic and
political factors beyond our control, and excluding special items and profit sharing provides investors the ability to measure financial performance in a way that is more indicative of our ongoing performance and is more comparable to measures
reported by other major airlines. Management uses mainline CASM excluding special items, fuel and profit sharing to evaluate our operating performance. Amounts may not recalculate due to rounding.

Significant changes in the components of mainline operating expense per ASM are as follows:



Aircraft fuel and related taxes per ASM decreased 4.6% primarily due to a 4.4% decrease in the average price per gallon of fuel to $3.07 in the first six months of 2013
from $3.21 in the 2012 period.



Aircraft rent per ASM decreased 7.6% due to recent lease extensions at lower average rental rates as well as a decrease in the average number of leased aircraft in the
first six months of 2013 as compared to the 2012 period.



Other rent and landing fees per ASM increased 7.7% primarily due to rate increases at certain domestic airport locations.



Depreciation and amortization per ASM increased 8.5% primarily due to an increase in owned aircraft driven by the acquisition of 20 Airbus aircraft since the second
quarter of 2012.

Express Operating Expenses:

Total express expenses decreased $27 million, or 1.7%, in the first six months of 2013 to $1.58 billion from $1.61 billion in the 2012
period. The period-over-period decrease was primarily due to a $26 million, or 4.7%, decrease in fuel costs. The average price per gallon of fuel decreased 4.8% to $3.09 in the first six months of 2013 from $3.25 in the 2012 period, on a 0.1%
increase in consumption.

Nonoperating Income (Expense):

2013

2012

PercentIncrease(Decrease)

(In millions)

Nonoperating income (expense):

Interest income

$

1

$

1

42.3

Interest expense, net

(174

)

(167

)

4.3

Other, net

(13

)

58

nm

Total nonoperating expense, net

$

(186

)

$

(108

)

71.6

Other nonoperating expense of $13 million in the first six months of 2013 consisted primarily of $31
million in special charges principally related to non-cash write offs of debt discount and debt issuance costs in connection with conversions of our 7.25% convertible senior notes and repayment of the former Citicorp North America term loan. We also
incurred $11 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the first six months of 2013. These charges were offset in part by a special $30 million credit in connection with an award received
in an arbitration related to previous investments in auction rate securities.

Other nonoperating income of $58 million in the
first six months of 2012 consisted primarily of a special $73 million gain relating to the slot transaction with Delta, offset in part by $10 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the
first six months of 2012 and $3 million in special charges for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft.

In the three months ended June 30, 2013, US Airways realized operating income of $477 million and income before income taxes of $403
million, driven by US Airways largest reported operating revenues in its history. Net income for the quarter was $325 million which included a $77 million non-cash federal income tax provision. This compares to operating income of $395 million
and income before income taxes and net income, each in the amount of $322 million, in the second quarter of 2012. There was no tax provision in the second quarter of 2012.

In the six months ended June 30, 2013, US Airways realized operating income of $579 million and income before income taxes of $472 million. Net income in the 2013 six month period was $394 million
which included a $77 million non-cash federal income tax provision. This compares to operating income of $451 million and income before income taxes and net income, each in the amount of $393 million, in the 2012 period. There was no tax provision
in the 2012 six month period.

US Airways results have been impacted by the following net special charges (credits) (in
millions):

Three MonthsEnded June
30,

Six MonthsEnded June
30,

2013

2012

2013

2012

Mainline operating special items, net (a)

$

24

$

9

$

63

$

11

Nonoperating special items, net (b)

2

3

(28

)

(70

)

Total

$

26

$

12

$

35

$

(59

)

(a)

The 2013 second quarter consisted primarily of merger related costs. The 2013 six month period consisted primarily of merger related costs and charges related to the
ratification of the US Airways flight attendant collective bargaining agreement.

The 2012 second quarter and six
month periods consisted primarily of merger related and auction rate securities arbitration costs.

(b)

The 2013 second quarter consisted of $2 million primarily related to debt extinguishment charges due to non-cash write offs of debt issuance costs. The 2013 six month
period consisted of a $30 million credit in connection with an award received in an arbitration related to previous investments in auction rate securities, offset in part by $2 million in charges primarily related to debt extinguishment costs
discussed above.

The 2012 second quarter consisted of debt prepayment penalties and non-cash write offs of
certain debt issuance costs related to the refinancing of two Airbus aircraft. The 2012 six month period consisted of a $73 million gain related to the slot transaction with Delta, offset in part by the $3 million in debt prepayment penalties and
non-cash write offs of certain debt issuance costs discussed above.

At December 31, 2012, gross NOLs available for use by US
Airways were approximately $1.4 billion for federal income tax purposes. To the extent profitable, all of US Airways NOLs are expected to be available for use in 2013. US Airways will use these NOLs to reduce its cash tax obligations when
profitable going forward. The NOLs expire during the years 2025 through 2031.

At December 31, 2012, US Airways was in a net
deferred tax asset position for financial reporting purposes, which included the NOLs, and was subject to a full valuation allowance. The federal and state valuation allowances were $126 million and $42 million, respectively, which included $32
million allocated primarily to certain federal capital loss carryforwards.

For each of the three and six months ended June
30, 2013, US Airways utilized NOLs to offset its taxable income. Historically, utilization of NOLs reduced US Airways net deferred tax asset and in turn resulted in the release of its valuation allowance, which offset US Airways tax
provision dollar for dollar. US Airways second quarter 2013 pre-tax income resulted in the utilization of NOLs and US Airways remaining valuation allowance associated with federal income taxes. This release of valuation allowance offset
only a portion of US Airways tax provision. Accordingly, in each of the three and six months ended June 30, 2013, US Airways recorded $77 million of non-cash federal income tax expense and $1 million of state income tax expense related to
certain states where NOLs were limited or unavailable to be used.

For each of the three and six months ended June 30,
2012, NOL usage and release of valuation allowance offset US Airways tax provision. As a result, US Airways did not record federal income tax expense and recorded a nominal amount of state income tax expense related to certain states where
NOLs were limited or unavailable to be used.

When profitable, US Airways is ordinarily subject to AMT. However as the result of a special
tax election made in 2009, US Airways was able to utilize AMT NOLs to fully offset its AMT taxable income for each of the three and six months ended June 30, 2013 and 2012.

Total operating revenues in the second quarter of 2013 were $3.91 billion as compared to $3.80 billion in
the 2012 period, an increase of $110 million, or 2.9%. US Airways increase in capacity coupled with record passenger load factors more than offset decreases in yield, and US Airways reported its highest quarterly operating revenues in its
history. Significant changes in the components of operating revenues are as follows:



Mainline passenger revenues were $2.57 billion in the second quarter of 2013 as compared to $2.45 billion in the 2012 period. Mainline RPMs increased
5.9% as mainline capacity, as measured by ASMs, increased 4.2%, resulting in a 1.4 point increase in load factor to a record 86.0%. Mainline passenger yield decreased 0.9% to 14.77 cents in the second quarter of 2013 from 14.91 cents in the 2012
period. Mainline PRASM increased 0.7% to 12.71 cents in the second quarter of 2013 from 12.62 cents in the 2012 period.



Express passenger revenues were $882 million in the second quarter of 2013 as compared to $916 million in the 2012 period. Express RPMs increased 3.5%
as express capacity, as measured by ASMs, decreased 0.3%, resulting in a 3.0 point increase in load factor to a record 79.8%. Express passenger yield decreased 7.0% to 30.39 cents in the second quarter of 2013 from 32.68 cents in the 2012 period.
Express PRASM decreased 3.4% to 24.25 cents in the second quarter of 2013 from 25.10 cents in the 2012 period.



Other revenues were $421 million in the second quarter of 2013, an increase of $27 million, or 6.6%, from the 2012 period. The increase in other
revenues was driven primarily by an increase in the volume of passenger ticketing change fees and checked bag fees as well as the PreferredAccess program.

Total operating expenses were $3.43 billion in the second quarter of 2013, an increase of $28 million, or
0.8%, compared to the 2012 period.

Mainline Operating Expenses:

Significant changes in the components of mainline operating expenses are as follows:



Aircraft fuel and related taxes decreased 3.8% primarily due to a 7.9% decrease in the average price per gallon of fuel to $2.92 in the second quarter
of 2013 from $3.17 in the 2012 period.



Aircraft rent decreased 5.2% due to recent lease extensions at lower average rental rates as well as a decrease in the average number of leased
aircraft in the second quarter 2013 as compared to the 2012 period.



Other rent and landing fees increased 19.8% primarily due to rate increases at certain domestic airport locations, as well as the timing of receipt of
a rent credit for one of US Airways hubs in the second quarter of 2012.



Depreciation and amortization increased 12.9% primarily due to an increase in owned aircraft driven by the acquisition of 20 Airbus aircraft since the
second quarter of 2012.

Express Operating Expenses:

Total express expenses decreased $27 million, or 3.2%, in the second quarter of 2013 to $814 million from $841 million in the 2012 period.
The period-over-period decrease was primarily due to a $21 million, or 7.4%, decrease in fuel costs. The average price per gallon of fuel decreased 7.8% to $2.96 in the second quarter of 2013 from $3.21 in the 2012 period, on a 0.4% increase in
consumption.

Other nonoperating expense of $8 million in the second quarter of 2013 consisted primarily of $2 million
in special charges principally related to non-cash write offs of debt issuance costs and $5 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the second quarter of 2013.

Other nonoperating expense of $13 million in the second quarter of 2012 consisted primarily of $10 million in net foreign currency losses
as a result of the overall strengthening of the U.S. dollar in the second quarter of 2012 and $3 million in special charges for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus
aircraft.

Total operating revenues in the first six months of 2013 were $7.32 billion as compared to $7.10 billion
in the 2012 period, an increase of $223 million, or 3.1%. Significant changes in the components of operating revenues are as follows:



Mainline passenger revenues were $4.76 billion in the first six months of 2013 as compared to $4.56 billion in the 2012 period. Mainline RPMs increased
5.1% as mainline capacity, as measured by ASMs, increased 2.8%, resulting in a 1.9 point increase in load factor to 84.6%. Mainline passenger yield decreased 0.6% to 14.76 cents in the first six months of 2013 from 14.86 cents in the 2012 period.
Mainline PRASM increased 1.5% to 12.48 cents in the first six months of 2013 from 12.30 cents in the 2012 period.



Express passenger revenues were $1.64 billion in the first six months of 2013 as compared to $1.68 billion in the 2012 period. Express RPMs increased
4.6% as express capacity, as measured by ASMs, increased 0.2%, resulting in a 3.3 point increase in load factor to 77.6%. Express passenger yield decreased 6.7% to 29.78 cents in the first six months of 2013 from 31.92 cents in the 2012 period.
Express PRASM decreased 2.6% to 23.12 cents in the first six months of 2013 from 23.73 cents in the 2012 period.



Other revenues were $842 million in the first six months of 2013, an increase of $64 million, or 8.3%, from the 2012 period. The increase in other
revenues was driven primarily by higher revenues associated with US Airways frequent flyer program, including increased mileage sales to business partners, an increase in the volume of passenger ticketing change fees and checked bag fees as
well as the PreferredAccess program.

Total operating expenses were $6.74 billion in the first six months of 2013, an increase of $95 million,
or 1.4%, compared to the 2012 period.

Mainline Operating Expenses:

Significant changes in the components of mainline operating expenses are as follows:



Aircraft fuel and related taxes decreased 1.9% primarily due to a 4.4% decrease in the average price per gallon of fuel to $3.07 in the first six
months of 2013 from $3.21 in the 2012 period.



Aircraft rent decreased 5.0% due to recent lease extensions at lower average rental rates as well as a decrease in the average number of leased
aircraft in the first six months of 2013 as compared to the 2012 period.

Depreciation and amortization increased 11.1% primarily due to an increase in owned aircraft driven by the acquisition of 20 Airbus aircraft since the
second quarter of 2012.

Express Operating Expenses:

Total express expenses decreased $35 million, or 2.1%, in the first six months of 2013 to $1.64 billion from $1.67 billion in the 2012
period. The period-over-period decrease was primarily due to a $27 million, or 4.8%, decrease in fuel costs. The average price per gallon of fuel decreased 4.9% to $3.09 in the first six months of 2013 from $3.25 in the 2012 period, on a 0.1%
increase in consumption.

Other nonoperating income of $17 million in the first six months of 2013 consisted primarily of a special
$30 million credit in connection with an award received in an arbitration related to previous investments in auction rate securities, offset in part by $2 million in special charges principally related to non-cash write offs of debt issuance costs.
US Airways also incurred $11 million in net foreign currency losses as a result of the overall strengthening of the U.S. dollar in the first six months of 2013.

Other nonoperating income of $59 million in the first six months of 2012 consisted primarily of a special $73 million gain relating to the slot transaction with Delta, offset in part by $10 million in net
foreign currency losses as a result of the overall strengthening of the U.S. dollar in the first six months of 2012 and $3 million in special charges for debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the
refinancing of two Airbus aircraft.

As of June 30, 2013, our total cash, cash equivalents and restricted cash was $3.97 billion, of which $350 million was restricted.

Sources and Uses of Cash

US Airways Group

Operating Activities

Net cash provided by operating activities was $925 million and $853 million for the first six months of 2013 and 2012, respectively, a
period-over-period improvement of $72 million. This increase in cash flows was due principally to our record operating profitability in the second quarter of 2013 resulting from the growth in revenues driven by ongoing industry capacity discipline
and consumer demand for air travel.

Investing Activities

Net cash used in investing activities was $627 million and $219 million for the first six months of 2013 and 2012, respectively.

Principal investing activities in the 2013 period included expenditures of $614 million for property and equipment and
consisted primarily of the purchase of 10 Airbus aircraft. Investing activities also included expenditures of $99 million for pre-delivery deposits for 24 Airbus a